Outsourcing agreement with leading reseller sets the tone for distribution

Partnership between Computer 2000 and Logical paves the way for further development of integrated supply chain model in the channel

Last Updated: 09/06/05

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30th June 2000

Computer 2000, the UK division of Tech Data Corporation, has agreed to provide leading UK reseller Logical, with a completely outsourced logistics and supply service for all PCs, servers, software and peripherals.

The agreement signals a new phase in the development of the channel in which more resellers are expected to transfer responsibility for all product inventory and shipments to a preferred distribution partner.

For Logical, the e-business integration and services arm of Datatec, the partnership is the first stage of a global initiative that will streamline the procurement of computer systems and peripherals by outsourcing fulfilment and logistics functions to specialist partners.

By outsourcing these non-core functions to distribution partners, Logical is able to focus on developing services specifically designed to meet the needs of the growing e-services market. The same business model will shortly be replicated by other Logical businesses around the world.

Computer 2000 has been focusing on the development of an integrated supply chain model in order to accommodate the changing needs of its reseller customers and their growing desire to outsource logistics functions.

Managing Director of Computer 2000, Julian Klein says: "We have made considerable investments in our warehousing, logistics and configuration capabilities in the UK, installing new computer systems, bringing in specialist staff and constructing a purpose-built 500,000 square-foot distribution centre and warehouse in the Midlands. That investment must and will continue as the needs of our customers change."

He believes that this agreement will be the first of many. "This partnership, and others like it, will play an increasingly important role in the development of the channel. Both companies are exploiting their real strengths and together we will deliver the highest standards of service to the customer and lower costs, making both organisations more efficient, effective and competitive.

"We believe the channel is moving increasingly in this direction, with specialist functions being carried out by specialist organisations. Resellers will continue to manage the end user customer relationship and provide the services and support the customer needs while Computer 2000, with its highly efficient logistics capability, delivers all the of the procurement fulfilment required to support those operations. It is the beginning of a new era in co-operation and development between distributors and reseller partners."

In its agreement with Logical, Computer 2000 will provide all the logistics, configuration and fulfilment functions for Logical’s UK desktop, server and peripherals business. Logical will focus on delivering value-added implementation and support services and on the development of its e-business solutions and services.

"The announcement is representative of our commitment to migrate Logical’s business to that of an e-business integration and services company," says Logical CEO, Rikke Helms. "Partnership with Computer 2000 will improve customer service in the supply of PCs, servers, software and peripherals. Computer 2000 is a strong partner for Logical and this agreement allows us to streamline our product supply business, focus on our core competency and make significant cost savings in our operation."

By leveraging Computer 2000’s experience and economies of scale, Logical expects immediate benefits to customers in terms of increased customer service and reduced order times. Transferring many of the back-office functions to Computer 2000 will also reduce overheads and lead to significant cost savings and improved sales performance.

Logical (UK) will retain management of the customer relationship including specifying equipment, providing all proposals and quotations and accepting orders. Computer 2000, will handle sourcing of all equipment, delivery direct to customer site, logistics, invoicing and credit functions.

Email njudd@computer2000.co.uk

Tel: +44 1753 696699; Mobile: +44 468 825959; email: jon.davies@logical.com

Tel: 01753 777363; email: clare.williamson@logical.com

Notes to editors:

Computer 2000 Distribution LTD, trading as Computer 2000, a member of the Computer 2000 Group based in Germany, is the largest IT distributor in the UK. Formed in 1983 as First Software LTD, Computer 2000 serves some 9,000 customer accounts and is divided into ten specialist divisions; Apple Systems, Datech 2000 (CAD), Cisco, Peripherals, PC Components, PC Systems, Networking, Software, Storage Solutions and Supplies. Computer 2000 is able to bring to a large and diverse customer base, comprehensive product portfolios and support.

Computer 2000 was founded in 1983 in Munich. Sales for its most recent fiscal year grew 23% to DM 11.497 billion (FY 1998/99). In July 1998, the world’s second-largest technology products distributor, Clearwater, Fla.-based Tech Data Corporation, acquired a majority interest in Computer 2000. Tech Data and Computer 2000 today distribute a total of more than 75,000 products to over 100,000 resellers in more than 70 countries worldwide.

Logical (www.logical.com) is the E-Integration and Services division of JSE-listed Datatec Ltd. (www.datatec-group.com). Driven from its London HQ, it has more than 2000 employees throughout operations in Paris, Berlin, Zurich, Sydney, Melbourne, Auckland, Johannesburg, New York, Chicago and Buenos Aires, with further plans of expansion.

Logical focuses on complex, high value e-business services that facilitate the transformation of its customers' businesses from Old Economy models to Internet based e-business models. Logical’s core offering is a set of methodologies and services that allow organisations to e-enable their businesses, whilst protecting their investment in existing systems, applications and databases. Logical’s primary focus areas are e-business infrastructures, e-business solutions and e-outsourcing – all complementary, high-margin tailored specifically to the needs of the rapidly growing international market for e-services. Logical comprises the major part of an E-business Services Group that Datatec intends to float on the London Stock Exchange in the second half of this year.